The investment community is all for the hand-holding and propping of equity prices.

They anoint themselves free marketers yet enjoy the central banking and central planning that adjust economic knobs to their liking, sans free market forces.  Everything is great, but it is still an emergency warranting excessive monetary easing, they say.

This weekend, a national financial newsletter writer, radio show host, and famed market timer, Bob Brinker, patted himself on the back for having called the Federal Reserve’s recent non-action.  He is not the only one, but he serves as a sampling of the mindset of those in the industry.

Besides the self-congratulatory antics of these financial analysts, going way out on a limb and predicting that a Federal Reserve that hasn’t raised rates in nearly ten years wouldn’t raise rates this time, subtle notions of ever expanding Fed powers and responsibilities were subliminally put into motion.  There is a movement afoot in the investment world that the Federal Reserve should concern itself with new areas outside its historical realm. 

This is dangerous, unwarranted, and out of bounds.

Three considerations were offered by this specific radio host as to why it was obvious that the Fed would leave rates unchanged.

FED DECISION NOT TO RAISE INTERESTS....Bob Brinker comments:

If you were with us on the broadcast last week, you heard us talk about three reasons why it was a no-brainer to vote no on an interest rate increase at this week's Federal Reserve meeting. …
==> One, the fragile global economy.
==> The strength of the trade-weighted dollar in foreign exchange trading.
==> And three, the fact that inflation is so low.

First, some of the world economies are weakening, and this would be a bad time to raise rates, even by a quarter-point.  China was mentioned as the example.  But when did the performance of other nation’s economies become a consideration for what is right for the Federal Reserve?  China’s markets soared for years.  Was that then a reason the Fed should move to higher rates?  Apparently not.  Were China’s markets and economies legitimate, or were they arranged and manipulated up, just as we saw the attempts to manipulate and arrange prices in the recent drop?  Economies of other nations that may be contrived should be of no concern to our Federal Reserve.  Economies of other nations that have entered into dangerous economic policies and are now on the ebb should not be considerations for Federal Reserve policy.  Certainly economies operated by Communists should not be on the radar.  When did the Federal Reserve become international in scope?

Second was the strong dollar.  Steve Forbes once said, and he is correct, that strong countries have strong currencies.  Yet the notion of today being championed by these financial pundits is that the Fed should not want a strong dollar.  The dollar has been strong of late, and it is said that this hurts our exporting.  True enough.  But where exactly is the mandate for the Federal Reserve to “knock down” the value of the dollar, or even consider its valuation to other currencies when making monetary decisions?  There is no such mandate.

Finally, the idea that inflation had not met the 2% Federal Reserve target.  Indeed.  Price stability has been fairly good the past few years (with the exception of health care, food, and housing), and the Fed should be delighted.  Their mandate clearly states that their mission is to promote stable prices.  As they measure, they have met their goal.  Yet inflation cannot mean stable prices, by definition.  Where is this idea that the Fed is supposed to promote inflation when stable prices are its mission?

It seems there is a dovetailing, a new array of considerations for the Federal Reserve to consider prior to rate adjustment decisions.  The Fed now declares that it is the keeper of the dollar, the promoter of inflation, and its decisions are tied to manipulated markets and economies.  With this new expanse comes a litany of convenient excuses not to act, not to raise rates off zero.  The Federal Reserve and its presumed powers and assumed mandates must be questioned and challenged.